Business Farming

Monday 26 September 2016

Beef prices on brink of a crash warns processor

Cattle glut and stagnant live trade will have a 'big effect' say ABP

Martin Ryan

Published 14/06/2016 | 02:30

A 'catastrophic' collapse has been predicted for the beef sector.
A 'catastrophic' collapse has been predicted for the beef sector.

The beef sector is facing a "catastrophic" collapse in demand this autumn, the country's largest processor has warned.

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An extra 80,000 cattle, combined with a market that is turning its back on Friesian types and a re-nationalisation of the French market, are set to hit prices in the latter half of 2016.

Finbarr McDonnell, managing director of ABP's Irish cattle operations, said the increased supply would have "a big effect this back end" and was adamant that a price fall was imminent.

"It is unfortunate that sterling is where it is and unfortunate that live exports are dead in the water," he told the Guild of Agricultural Journalists at ABP's Clones plant last week.

He also urged the country's expanding dairy sector to prioritise cross-breeding with the traditional Irish Hereford and Angus breeds for which "we are pushing an open door" on export markets.

However, the ICSA president, Patrick Kent, responded that the ABP comments were proof that live exports were essential.

"The factories have finally admitted that they cannot sell our stock, which is why live exports should be the top priority for the Minister," he said.

Market

Mr McDonnell said the market is now 10 times more in favour of Hereford and Angus than Friesian beef, adding that he was "very worried" about the consequences for the progeny of dairy farms unless they adapt to breeding more for market requirements.

ABP currently handles over a fifth of national output, equivalent to 125,000t per year. It plans to expand further on its 41 sites within the EU, and is "very optimistic of a successful outcome" to its bid to buy 50pc of Slaney Foods within the coming weeks. The move would result in ABP controlling 28pc of the national beef kill, and has been strongly resisted by farming organisations.

In addition to the move away from Friesian beef, the ABP boss said there was only a "limited" market for continental type beef and the heavier carcase weights, which would require farmers to liaise directly with processors to fine-tune requirements and production schedules.

The IFA's livestock secretary, Kevin Kinsella, confirmed that supplies were expected to increase by 50,000-80,000 head in 2016.

However, the downturn in dairying could add to the kill during the last quarter of the year with an increase in cull cow disposals likely. Cull cow numbers jumped by 8pc in the most recent weekly slaughter numbers.

Processors have also been stressing the challenges posed by a French market that is shifting towards fresh cuts. "The French issue is big and I think it will have a big effect this backend," said Mr McDonnell.

Meanwhile, farm bodies have hit out at the alleged use of illegal growth promoter 'angel dust' after tests detected clenbuterol in an animal on a farm in the border region. Some 90 half-litre bottles of 'angel dust' were found in searches of the attic of a Monaghan farm.

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